Class Action Lawsuit Filed Against Cohen & Slamowitz, LLP, Encore Capital Group, MRC Receivables and Midland Credit Management for Alleged FDCPA Violations Continues

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United States District Judge P. Kevin Castel denies Encore Capital Group, Inc., MRC Receivables Corporation and Midland Credit Management, Inc., joint motion to dismiss all allegations in New York class action lawsuit (Case 1:10-cv-05868-PKC) filed by Weisberg & Meyers, LLC, Attorneys for Consumers.

A class action lawsuit filed in the United States District Court in the Southern District of New York (Case 1:10-cv-05868-PKC) by Weisberg & Meyers, LLC, Attorneys for Consumers, continues to move forward after a joint motion to dismiss filed by defendants Cohen & Slamowitz, LLP, Encore Capital Group, MRC Receivables Corporation and Midland Credit Management, Inc. (MCM) was denied by United States District Judge P. Kevin Castel for 3 out of 4 alleged violations of the Fair Debt Collection Practices Act. The Judge’s order (Case 1:10-cv-05868-PKC Document 38) refused to dismiss the lawsuit’s allegation that defendants Encore and subsidiaries MRC and MCM could be held vicariously liable for potential FDCPA violations in a collection letter sent by Cohen & Slamowitz, LLP, an affiliated collection law firm that is part of Encore Capital Group’s debt collection network.

The original class action complaint, filed in November 2010, alleges a mailed communication plaintiff received from “Law Offices of Cohen & Slamowitz, LLP” contained multiple FDCPA violations. Plaintiff’s consumer account was originally purchased from Citibank by Encore Capital Group, along with countless others, as part of a consumer accounts portfolio. According to the communication and court documents, the law firm was attempting to collect the debt, now owned by Midland Credit, with an offer of a 50% off “Tax Season Special Discount” to settle the debt in full. The mailed communication and thousands exactly like it, also allegedly falsely represented the creditor as “Midland Credit” rather than “MRC Receivables”, and used the prefix “Law Firm Of” in lieu of the firm’s legal name “Cohen & Slamowitz, LLP”, both potential Fair Debt Collection Practices Act violations. Judge Castel’s order declined to dismiss these allegations against the defendants.

According to the allegations in the complaint, after a debt portfolio is purchased by Encore Capital Group, MRC Receivables Management takes title and a “proprietary consumer level collectability analysis” is performed to determine those accounts which are the most viable for collection post purchase. Midland Credit Management is responsible for managing and servicing the collection of the debts owned by MRC and other Encore debt owning subsidiaries as part of the agreement between MRC, Midland and Encore, the complaint alleges. According to the complaint, an outsourced legal collections channel comprised of more than 75 vendor relationships with collection law firms is used to collect debts where allegedly the debtor can pay but is unwilling to do so. The complaint further alleges Cohen & Slamowitz, LLP is part of the Encore network of collection law firms and as such, agreed to follow all policies and practices set forth by Encore, MRC and Midland.

The class action lawsuit alleges that through the collection efforts of its subsidiaries and network, Encore and its subsidiaries can be held vicariously liable for violations of the Fair Debt Collection Practices Act. Encore, MRC Receivables and Midland Credit Management filed a joint motion to dismiss claiming they are not liable for alleged violations. The Judge’s order permits the plaintiff’s claim of alleged liability for Encore, MRC and Midland Credit to proceed despite their motion to dismiss.

The class action lawsuit was filed on behalf of all persons located in Connecticut, New York and Vermont who, within one year before the date of the original complaint, received a letter from “Law Offices of Cohen & Slamowitz, LLP” identifying “Citibank/Associates” as the original creditor and “Midland Credit” as the creditor. Encore Capital Group, Inc. is the largest publicly traded debt buyer (by revenue) in the United States according to Wikipedia and industry research. Encore purchases charged off consumer receivables portfolios for pennies on the dollar and according to a presentation available for potential investors on Encore’s website, has acquired 36 million charged off or in default consumer accounts since inception, comprised mostly of unsecured credit card accounts Encore employs and manages a network of complex operational channels which has 10 known subsidiaries including MRC Receivables Management, and Midland Credit Management, and a network of collection law firms including Cohen & Slamowitz, LLP, to maximize debt collection efforts to the fullest extent possible.

About Weisberg & Meyers, LLC, Attorneys for Consumers
Weisberg & Meyers LLC, Attorneys for Consumers, is a nationally recognized consumer law firm, has attorneys licensed to practice in Arizona, Colorado, Florida, Georgia, Illinois, New Jersey, New Mexico, New York, North Carolina, Oklahoma, South Carolina, Tennessee, Texas and Washington, and works with attorneys throughout the country to protect the rights of aggrieved consumers. The Firm’s diverse practice includes claims under the Fair Debt Collection Practices Act (FDCPA) and Fair Credit Reporting Act (FCRA), as well as violations of the Telephone Consumer Protection Act (TCPA), Truth In Lending Act (TILA), the Electronic Fund Transfer Act (EFTA), Fair Credit Billing Act (FCBA), Equal Credit Opportunity Act (ECOA), Consumer Leasing Act, Credit Repair Organizations Act, (CROA) and State Unfair and Deceptive Practices Acts (UDAP’s). The Firm also offers Debt Settlement services, prosecutes Class Action Lawsuits, and handles Breach of Warranty, Lemon Law and Consumer Fraud Claims.

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Marshall Meyers
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